The latest conflict between Iran and Israel just made Europe’s already precarious energy and economic situation a lot worse.
Many analysts and politicians are celebrating Europe’s resilience after losing its natural gas supply from Russia.
“Two years on from Russia’s invasion of Ukraine, trade in energy products between Russia and the European Union has largely disappeared. The EU has adapted remarkably well to a decoupling that many would have considered impossible.”
There is some truth here but it misses the larger picture. In the wake of Russia’s invasion of Ukraine, the world has witnessed a major shift in its geopolitical, economic, and social order. These changes have had a particularly large effect in Europe. Events in the Middle East make things even worse.
The Covid-19 Pandemic in 2020 resulted in a re-arrangement of supply chains and trade dependencies, prompting countries to consider the vulnerabilities inherent in globalized production networks. The era of unipolar dominance by the United States has given way to a more multipolar world. The traditional alliances and partnerships that underpinned the post-World War II order are unraveling.
Just before Russia’s invasion of Ukraine, China and Russia issued a joint statement declaring that their partnership had “no limits” in opposing NATO expansion. They further stated their intention to reshape the global governance system to be more representative of the changing global landscape, challenging the current US-dominated world order.
In early 2024, the BRICS group of emerging-market nations—Brazil, Russia, India, China and South Africa–expanded to include Saudi Arabia, Iran, the United Arab Emirates, Ethiopia and Egypt. These countries now hold a dominant position on more than half of the global oil exports, with major implications for oil prices and energy geopolitics…
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